Euro Pound Exchange Rate Still Lower but No-Deal Brexit Remains Possible
The Euro Pound (EUR/GBP) exchange rate has been trending lower this week as Brexit deal bets rise. However, analysts are concerned that a no-deal Brexit is still possible. If no progress is made soon, the Pound (GBP) could plummet.
Since opening this week at the level of 0.9156, EUR/GBP has been trending with a downside bias. At the time of writing, EUR/GBP is trending near the level of 0.9013.
This is close to last week’s opening levels, and EUR/GBP has been fairly steady near these levels since yesterday.
The Euro (EUR) remains appealing overall and the pair is not far from its best levels in months. Optimistic Brexit developments could mean more losses, but high volatility is to be expected either way.
Euro (EUR) Exchange Rates on Standby but Eurozone Data Remains Solid
The Euro continues to be driven by strength in rival currencies, like the Pound and US Dollar (USD).
As the Pound rises on Brexit hopes this week, the Euro has fallen against it.
However, the Euro remains fairly appealing overall. Investors are hesitant to sell the shared currency overall due to the Eurozone’s comparatively more effective handling of the coronavirus pandemic.
Recent Eurozone data has helped the Euro to avoid losses as well. Many of yesterday’s Eurozone PMI projections beat forecasts, and today’s French business confidence rose to 93 as expected.
Pound (GBP) Exchange Rate Advances Depend on Brexit Deal Being Secured
The Pound has been gaining this week, but it could just as easily tumble again depending on the fate of the Brexit process.
Sterling has been gaining on hopes that the UK and EU are getting closer to reaching a deal on Brexit. However, a no-deal Brexit remains possible, meaning there is still a significant downside risk in the Pound outlook.
According to Michael McCarthy, Chief Strategist and Broker at CMC Markets, the Pound’s recent gains are somewhat deceptive:
‘Forex traders appear largely unfazed by the possibility of a no deal exit,
The strength in Sterling is remarkable.’
Euro Pound (EUR/GBP) Exchange Rate Still Awaiting Brexit Outcome
Pound movement may be cooling a little today, but some kind of Brexit outcome is still expected over the coming week. High volatility in the Pound is inevitable.
If the UK and EU fail to reach a deal soon, no-deal Brexit fears are likely to intensify considerably, and the Pound would plummet. This would make it easier for EUR/GBP to trend near its best levels in months again.
The Euro could also strengthen against the Pound if the Euro benefits from a fresh fall in its rival the US Dollar (USD).
However, the Euro to Pound exchange rate may be in for considerable losses instead if a Brexit deal is reached.
Officials say that fisheries remain the biggest outstanding issues in talks. If there is a Brexit deal in the coming week, the Pound would surge higher.
Brexit negotiations are also likely to overshadow today’s Bank of England (BoE) news and tomorrow’s UK retail stats for Euro to Pound exchange rate investors.
